Suzuki JV With Toshiba, Denso To Set Up Electric Car Battery Plant In Gujarat

Suzuki JV With Toshiba, Denso To Set Up Electric Car Battery Plant In Gujarat

To invest Rs. 1151 crore for lithium-ion battery plant in Suzuki's existing campus in Gujarat's Hansalpur. The batteries are primarily for use in Suzuki hybrid models, but supply to other OEMs also likely.

The JV's new plant will rollout locally made batteries for use in hybrid and all-electric cars by 2020.

Highlights

The investment for the lithium-ion battery factory is Rs. 1151 crore

Suzuki will supply batteries to other OEMs as well

The total annual capacity of the plant has not been announced yet

Japan's Suzuki Motor has said its lithium-ion battery manufacturing joint venture (JV) with Toshiba and Denso will invest ₹ 1151 crore ($180 mn) to set up production facilities. The JV's new plant will rollout locally made batteries for use in hybrid and all-electric cars by 2020. The lithium-ion batteries will primarily be used by Suzuki for its own car models, however the JV would be open to supplying batteries to other OEMs as well. It may be recalled that the three companies had announced this JV in April 2017.

Announcing the investment and production targets, Suzuki Motor Chairman Osamu Suzuki said that the battery plant will also be housed at the Suzuki Motor Gujarat (SMG) campus in Hansalpur, where land has been allocated to the project inside the vendor park. The JV's initial investment of Rs 1151 Cr is likely to cover the manufacturing facility alone, though the plant's capacity remains unannounced. Suzuki is likely to set a production target once it has a fix on the kind of demand it would see for battery operated or assisted models. Osamu Suzuki has indicated that the JV's initial production may well be directed primarily towards hybrid car requirements. He said, "The JV plans to mount these batteries on Hybrid vehicles manufactured in India, and export these genuinely manufactured in India vehicles to international markets. We plan to continue with our efforts to promote make-in-India program further." Given the current lack of incentives for hybrids in India there is a possibility that the entire production of the JV is to be used only for export models. However sources at Maruti Suzuki say that cars made in India with hybrid or all-electric powertrains are also expected to be sold domestically, in addition to being exported in large numbers.

The move provides a boost to Suzuki's stated 'Make In India' objectives of using India as a major base for supply of its cars worldwide. Suzuki owns 50 per cent in the JV while Toshiba holds 40 per cent and Denso the remaining 10. SMG has already commissioned its first 250,000 units capacity car plant in Gujarat earlier this year. It has a second one with the same capacity under construction that will open doors in 2019. Osamu Suzuki has also announced a third similar-sized car plant at the same location. This 3rd plant will see the company invest ₹ 3800 crore ($600 million), making Suzuki's presence in Gujarat even larger. You can read about that announcement here.